Mortgage frauds that prey on buyers with high credit scores tend to work like this:
1. A scam artist finds a buyer with a high credit score.
2. The scam artist gets a fraudulent appraisal that inflates the property's true value.
3. The buyer's high score and name are used to trick a bank into making a type of loan that requires little supporting financial information. The appraisal is used to get a bigger loan than the house is worth.
4. The seller is paid for the home.
5. Usually with the help of the seller, a loan officer or mortgage broker, the scam artist walks away with the difference between the loan amount and the price paid for the home by representing himself as a consultant, home remodeler or other service provider. Money is paid at closing directly to him or through companies controlled by him.
6. The buyer is stuck with a mortgage higher than the home's value.
Source: FBI
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